Skip to content

Do we need a Chief Negotiation Officer?

According to a recent article from McKinsey & Company, 93% of business leaders of companies with more than $1 billion in revenue reported “great interest” in introducing a new role to improve negotiating results: that of chief negotiation officer. 

In a webinar conducted today, members of World Commerce & Contracting do not appear to agree. “A trouble-maker”, observed one. “They’d need to be super-human”, commented another.

Where executives and today’s commercial negotiators agree is that negotiation is a critical competence and it is often frustratingly difficult, especially when it involves large organizations. Authorities are frequently unclear, stakeholders are narrow-minded or rigid in their thinking, gaining attention to develop plans or make decisions can be tortuous. In fact, negotiation is symptomatic of organizational complexity – and it is hard to see how a Chief Negotiation Officer would fix the multiple challenges that stand in the way of speed and value.

That’s not to say we should simply shrug our shoulders and accept the status-quo. It is clear that improvements can and should be made. Digitization of business processes and consequent integration of data flows will surely help, but that is not enough. Simplification of contracts (to make them easier to understand and discuss) is certainly one step. Moving away from rigid agreement templates to more dynamic clause libraries, with pre-determined fall-backs, will facilitate many simpler negotiations, freeing resources to focus on the more important transactions and relationships. Developing and implementing standard planning methods and techniques brings immediate benefits and supports capture of results, allowing future analysis of what works and what doesn’t.

It can certainly be argued that someone needs to have accountability for developing an organization’s negotiating competence, though this could equally (and perhaps more amicably) be achieved through an executive council of key stakeholders. There is also some attraction in creating a Center of Excellence, though again its role and remit must be carefully defined.

Negotiation is important – and probably too important to be thrust onto the shoulders of one person. What do you think?

If saving the world depends on contracts, is it time to give up?

At WorldCC’s recent Symposium, BioNtech CEO Ugur Sahin shared an uncomfortable truth. When the need is urgent, there’s no time for contracts. The alliance between BioNtech, Pfizer and Fosun Pharma was founded on ‘trust-based collaboration’ – a strong focus on shared governance and open, honest communication. When the world needs a vaccine, there’s no time for the traditional debates over contract terms.

Fast forward to today and a conversation with ESG guru, John Elkington. “The experts tell us that we have ten years to save the world”, said John, before musing over whether time would expire before the necessary contracts are in place.

Our environment, our social cohesion, our corporate governance all depend on shared commitments and resilient relationships. Contracts should be at the heart of building the networks and the ecosystems that we need to tackle the massive challenges that lie ahead. Yet, as John pointed out, the evolution and development of contract law and contracting practices move at a snail’s pace. So will an inability to design effective commercial mechanisms lead to the downfall of our world?

Commerce re-imagined

Ugur, John and a myriad of others are calling on the commercial community to respond. We must devise new ways to innovate and to accelerate the way that business relationships are formed and managed. As we discovered during the pandemic, it is essential to be flexible, adaptive and creative. Now, that spirit must not only live on, but it must move into overdrive.

That is what makes this year’s WorldCC Summit of such major importance and excitement. The nature and the quality of the speakers, the panels and the topics under debate are unparalleled. The diversity of those attending is precisely what our world needs right now – it is trust-based collaboration in action, as we rise to the shared challenge of making our world a better place.

If you are reading this, please join us, be part of this energized community as we discuss and develop the commercial frameworks, the contracting models and the collaborative relationships that are so critical to our future.

If only we weren’t so busy ….

The pandemic has caused a surge of interest in contract and commercial management, with executives paying increased attention to building capability. For many, this means supporting initiatives to introduce new tools and software and pushing for improvements to internal processes.

The WorldCC benchmarking study of commercial and contract management has already attracted replies from more than 300 organizations. Gain insight to all the trends and discover ‘best practice’ by participating here.

Priorities vary, with some focused on growth, some on speed and others more concerned about improved management of risk or finances. But no matter where the priorities lie, the expectations are clear – commercial resources are being pushed to increase their commercial relevance and the value they deliver.

A tough balance

Finding the right balance is not easy. Traditional contract management teams are strongly oriented towards risk mitigation and compliance, with less than one in twenty giving active thought to competitive advantage and only one in ten pursuing opportunities for value-add. Commercial groups are in general better equipped to demonstrate core value, with a much stronger focus on financial impact and change management.

Discover how your priorities and current performance compare to others in your industry and to the global leaders. Enter the confidential survey here.

There is widespread recognition of a need for action. However, a common refrain from those responsible for contract and commercial management is that operational workload is a key barrier – though some admit that they lack the right mix of skills for the fast-changing business environment. That shortfall often extends to other groups and functions on which they depend – for example, technical staff with sufficient understanding of contracting.

Investment is only part of the story ….

The readiness to make investment and to grow the role of contract and commercial management is good news. But what goals and targets should we be setting? Where will we find ourselves competing for rare skills and talent? How big are the gaps between leaders and laggards? To what extent will competence be created through dedicated CCM teams, versus a more distributed capability? These questions and many others will soon be answered for those who take time to provide input. All data remains confidential and is reported only in a consolidated form. Discover more at the 2021 Benchmarking Survey.

Digitizing the contracting process

From an unloved bystander to the star of the show, digitization of the contracting process is now a priority in more than 75% of organizations. Driven by the experiences of the pandemic, there is a new appreciation that contracts are much more than just words.

Digitization may be a priority – but for many, where to start and who will lead remains a source of confusion and contention

But where to begin and who will lead? The traditional challenges associated with contracting have not changed. It remains a multi-functional activity that depends on concerted action by a wide variety of stakeholders. A study being conducted by World Commerce & Contracting in partnership with KPMG reveals the consequences of this lack of clear ownership.

To participate in the survey and receive the report, visit

Early results indicate that there is little consistency in where digitization initiatives are focusing or on who is sponsoring or leading them. In many cases, this is threatening the level of success – or indeed, whether there will be any sustainable improvement. From a practical point of view, digitization often needs to occur in bite-size chunks – but evidence suggests that it rarely succeeds if it is undertaken without first examining the entire process lifecycle and the data flows that occur within it.

It is the need for coherent and easily accessed data that is in most cases prompting the push to digitize. Many survey respondents believe that this need may mark a turning-point for the contracting process, resulting in the appointment of a more formal process owner with responsibility to ensure the quality and integrity of data flows and analytics.

Share your thoughts and experience at

Will digitization fix the problem with contracts?

When tech meets humanity

In a webinar on March 9th, I’ll be joining legal and contracting experts Craig Conte and Mark Ross to discuss the future of contracts and contract management. Our research report (Tech Meets Humanity) suggests that fundamental change is arriving much faster than we expected – or will the forces of complexity once again stand in our way?

I rarely come across an executive who has a good word to say about contracts. Sure, they like winning them, but they hate the process and wish it could be made much simpler. Recent comments have included an unfavorable comparison with root canals and a suggestion that contracts should be declared obsolete.

So if there is such dislike at top levels, why hasn’t anyone done anything to fix it? The answer is that it’s just too complicated, there are too many stakeholders and – of course – it can’t be done unilaterally. Plus there are powerful forces to overcome, with the legal and finance profession often wedded to traditional methods and approaches.

Contract lifecycle management systems were supposed to fix the problem. By and large, they have not. They may have masked the issues to some extent and allowed some reduction in cycle times, but they have not addressed many of the core inefficiencies or sources of lost value. Is digitization the answer?

Join us on March 9th as we examine the problem, discuss the solution and explore the obstacles that must be overcome to secure a better future. For details and to register, click here.

Red lines lead to red faces: EU Commission Versus AstraZeneca demonstrates the need for change

Opinion: Tim Cummins & Sally Guyer

Contracts provide frameworks for business relationships and, as we know, when the relationship is going badly, out comes the contract. That is when we have executives and politicians engaging in the unedifying spectacle of citing terms and conditions that they don’t fully understand and the people who wrote them are unable to explain …

It is helpful when contracts provide a practical operational guide, especially to assist when things are not going as expected. If they are designed and drafted with this purpose in mind, it enables business people – the non-lawyers who are the ones requesting the contract – to assess and validate its contents. They are the ones who should be affirming that an agreement reflects their intent and effectively addresses some of the ‘what ifs’ that could derail performance.

But of course, contracts are rarely like that. They are based on legal traditions that render them almost incomprehensible to those outside the profession (past research suggests 88% of business people find contracts ‘difficult or impossible’ to understand).

So, in spite of all the redlining that doubtless went on when finalising the agreement between the European Commission and AstraZeneca, the result appears to have been an ambiguous contract that is not ultimately going to help anyone resolve the immediate situation – a shortage of supply. All we do have is a lot of red faces. Whether the contract ultimately offers the Commission any effective recourse only time will tell – but in the meantime, we are seeing the rather unproductive spectacle of politicians selectively citing contract terms as part of a public relations exercise in blame avoidance.

We all know that contracts and contracting processes need to change, that they should become business assets and vehicles for communication rather than weapons. Once again, this life-and-death incident proves the point.

Barriers to collaboration

It is understandable that collaboration is such a big topic these days. The pandemic caused many people and organizations to appreciate the extent of our interdependency, the fact that the best solutions come from working together. Of course, not everyone succumbed to this spirit of collective effort, but in general those who collaborated seem to have emerged stronger and with a more positive outlook than those who did not.

But now, as we move forward, will collaboration survive, especially in a business context? We have heard for years that people typically prefer to collaborate, that they like ‘win-win’ scenarios and behaviors. But turning that preference into a reality has proven challenging ……

The three big barriers

Number one: do people even have a common understanding of what collaboration means? In a recent (small) survey of suppliers, the overwhelming view was that many buyers say ‘collaboration’ when they actually mean ‘subservience and conformity’. So when we use the word, do we actually mean that we want to develop a solution together, based on shared input and mutual respect, or do we actually mean ‘Do what I say and don’t complain’?

Number two: measurement and motivation systems mostly get in the way. Although we prefer a collaborative environment, there are just too many factors that derail our good intentions. The need for speed, the pressure for short-term savings or rapid revenue, the difficulty of coordinating and reconciling multiple opinions. If our personal goals and incentives were based on the way we behave, the way others see us, the quality of longer-term results, then collaboration might rapidly flourish – but until then, it remains a ‘nice to have’.

Number three: external collaboration is thwarted by the absence of internal collaboration. Our same mini-survey highlighted how rarely organizations speak with one voice. Different groups and functions typically reflect different interests. As one respondent observed, even if different stakeholders were united at the beginning of a contract or relationship, their views often diverge over time. This leaves the counter-party ‘stuck in the middle’, trying to deliver something that satisfies all sides and in consequence ‘not seen as collaborating appropriately’.

So if you are serious about collaboration, you really do need to reflect at both a personal and organizational level and ask whether you have the attitudes and capabilities to make it a reality.

Contracts – another victim of COVID-19

While it would be premature to announce the demise of contracts, there is no question that the pandemic revealed their unhealthy state. In practical terms, they served almost no purpose in dealing with the issues created by COVID-19.

Join World Commerce & Contracting CEO Sally Guyer in conversation with Ned Coleman, Executive Director of Contracts at Accenture, as they discuss the impact of the pandemic on contracts and contracting practicesregister here.

Most business contracts attempt to create certainty. They are designed to impose fixed obligations and establish consequences for failure. Negotiations repetitively fixate on risk allocation – liabilities, indemnities, performance undertakings. Endless hours – and large amounts of money – are spent in agreeing terms which proved irrelevant in dealing with the pandemic.

As market uncertainties continue and increased volatility and variability are established as ‘normal’, what is the future of contracts? Do we find ways to make them more agile and adaptive? Does it mean shorter periods of commitment, or perhaps greater focus on governance terms and principles? It is clear that contracts will not disappear – there are many reasons why we need them. But they must change; we must step back and ask ourselves once more ‘what is the purpose of contracts?’ We must recognize that the depth of purpose varies so there is no ‘one size fits all’ response – for example, a short term commodity purchase is not the same as a long-term service delivery.

Organizations are already pondering and designing for the future – reconsidering contract terms and commercial models; re-thinking risk analysis and scoring; moving away from rigid templates towards AI-powered clause libraries.

In recent times, the standardization of contracting practices has operated as a constraint on business and negotiations have become a battle over the relative power of the parties to impose their preferred terms. That must change. We need contracts, but they must be practical, intelligent and sources of mutual value. 2021 will be a year when contracting recovers its health.

Join World Commerce & Contracting CEO Sally Guyer in conversation with Ned Coleman, Executive Director of Contracts at Accenture, as they discuss the impact of the pandemic on contracts and contracting practicesregister here.

Is it your contract or your relationship that under-performs?

There is a lot written about the role of contracts in value delivery and erosion. Traditionally, many have argued that value comes from the relationship and that contracts have little relevance, unless things go badly wrong. In many respects, the pandemic can be seen as supporting this argument. In most cases, contracts proved of little practical use in addressing or resolving the chaos that ensued.

But is this due to an innate failure of contracts themselves, or more because of failure by those who develop contracting strategies and standards? Yesterday, I was looking through past editions of IACCM’s Most Negotiated Terms report and was reminded that we had written about this particular issue in 2015, when we highlighted the contrast between contracting for transactions and contracting for relationships. Here is what it said:

“A transaction is a quick, short-lived exchange. It’s about this deal, these terms. Get a signature, and you’re done.

Negotiating relationships is a process with no clear beginning or end. Your goal is to build sufficient understanding, comfort, and trust between parties that you can work together now and in the future, under conditions that enable both sides to prosper.

• In a deal, the counter-party is often treated as an opponent, in that your goal in the negotiation is to ‘win’ by conceding as little as possible and to have them conform to your terms. In a relationship, the other party is viewed more as a preferred partner and you want to gain from their knowledge, experience or special values, so you are interested by their perspectives and their thoughts and ideas on the terms you are negotiating.

• Deals are about getting as much of what you want as you can carry away. Relationships are based on fair division and joint burden-sharing, recognizing that benefits come over time.

• In a deal, you limit interactions with the other party: limiting the information you provide and the people they are allowed to speak with, guarding your responses, pressing your position. In a relationship, you are more relaxed, open, and natural: sharing information, making connections and truly seeking to understand and resolve differences.

• In a deal, you may exaggerate the strength of your position or try to trick the other side into giving in or giving more than you really need (e.g. to satisfy short-term measures of success). Successful relationships are based on honesty, reliability, and follow through – they are thinking about values achieved over the longer term.

• Deals are static, inflexible, with exhaustive contracts intended to guarantee that every term and condition will remain “carved in stone” until the transaction is completed. Relationships are also based on fundamental agreements, but they are more accommodating, less rigidly detailed. Because relationships take place over time, change needs to be anticipated and managed constructively rather than ignored because it falls outside the scope of the initial agreement. Relationships are dynamic, not carved in stone.”

So perhaps one of the big lessons from the pandemic is our need to apply much more thought to what we are trying to achieve in our supply transactions and to design contracts and their terms accordingly.

2021: the year when a light is shined onto contracts

Only 48% of organizations consider themselves ‘good’ at monitoring the in-life financial performance of their contracts. A new study from World Commerce & Contracting reveals the types of contract and the industries most affected by the resulting value loss and erosion.

The report, released to the 500 participating organizations today, confirms persistent problems created by the fragmentation of process, systems and resources that are applied across the contracting lifecycle. Without connectivity, there is limited visibility and therefore a lack of the data needed to support urgent action.

There is also a view that, even when senior management is aware of possible value erosion, the problem seems too complicated to fix. The fragmentation that causes losses is so pervasive that fixing it would require too many changes to business systems and operations.

Fresh thinking, fresh capability

Has the time now come when these problems can be addressed? For many CFOs, the pandemic has created heightened urgency in protecting revenues and reducing costs. There is a view that new technologies may prove game-changing, with digital platforms that could aggregate and drive data flows between systems. Artificial intelligence and machine learning are starting to augment human resources, in ways that support simplification and promote self-service. New thinking about standards and contract design offer the prospect of increased market and business intelligence, for contracts to become tools that deliver operational efficiency.

The World Commerce & Contracting report shines a light on the types of contract and the industries where maximum benefits can be achieved. It complements other, related studies, undertaken in 2019 and 2020, such as the investigation into Post-Award Contract Management; the Most Negotiated Terms report; studies on Relational Contracting and governance; and recent papers on Supply Ecosystems, Friction Points and the use of Artificial Intelligence. Together, these offer a blueprint for change.

What does it mean for organization and jobs?

It is clear that such radical change will impact organizational structures and potentially lead to more fundamental restructuring of jobs. There are already signs of a growing integration of contract management and relationship management. New systems will empower the front office and reduce the need for many of today’s back-office support activities. At the same time, better integrated data enables a more agile and adaptive approach to commercial and contracting practices, which in turn requires an increase in the strategic resources needed to manage and implement change. These impacts are being assessed in a new World Commerce & Contracting study which will be released later this month. To be among the first to receive the results, you can participate here.

World Commerce & Contracting research reports are available to members in the Research Library at In a few cases, they are available at a summary level only, with the full report restricted to members of the WorldCC Research Forum.